Bankers, regulators and government officials have said limiting cash transactions and giving preference to other negotiable instruments over cash transactions will help control financial crimes and corruption.
Speaking at an interaction on ´Cash Transaction Minimization´ in the capital on Friday, they said the use of negotiable instruments over cash transactions will also help control revenue leakage.
Negotiable instruments denotes to document guaranteeing the payment of a specific amount of money like checks, drafts, credit cards, debit cards, Internet banking, mobile banking and branchless banking, among others.
Though the Asset Laundering Prevention Act (ALAP), 2008 requires any firm or individual to make transactions only through negotiable instruments while purchasing any products or services to a certain amount or more than the specific amount that the government publishes in the Nepal Gazette, the delay in announcing threshold for cash transaction has affected implementation of the provision.
“The use of negotiable instruments not only helps in controlling crimes, it will also help to reduce the cost of the government by lowering banknote printing costs. Also, banks can depute fewer staff at their cash counters," Hari Kumar Nepal, assistant director at Nepal Rastra Bank´s Financial Information Unit, said, making a presentation on ´Cash Transaction Threshold: Benefits and Challenges´. “The cost for the government in terms of publishing, issuing, circulating, handling and management, destruction and securities is increasing each year while the revenue leakage and under-invoicing is one the rise due to use of cash for transactions. Minimization of cash transactions will give the country´s economy a new dimension.”
According to Nepal, the central bank has proposed to the government set a threshold of Rs 100,000 for cash transactions. If the central bank´s proposal is endorsed by the government, use of cash for transactions worth more than Rs 100,000 will be considered an offense.
Article 41 of ALAP states that the government shall make an arrangement of such threshold in consultation with the central bank.
Bankers have cautiously welcomed the threshold proposal. While some bankers said such threshold should be increased, the other said that it should be implemented in a phase-wise manner. “The threshold might not be practical in rural areas. However, this should be implemented first in municipal areas and later in rural areas,” Rajan Singh Bhandari, outgoing president of Nepal Bankers Association, said.
Similarly, Anil Keshary Shah, vice-president of NBA, said cash-less society will help in ensuring transparent economy by curbing the flow of black money. “There is connection in cash, crime and corruption. Cash-less transaction helps to cut off the connection between cash, crime and corruption,” he added.
NRB Deputy Governor Maha Prasad Adhikari said the central bank was open to consider the threshold.
Officials of the central bank said they would implement threshold on cash transactions by giving one-year notice.
source: republica,6 dec 2014
LINK
Speaking at an interaction on ´Cash Transaction Minimization´ in the capital on Friday, they said the use of negotiable instruments over cash transactions will also help control revenue leakage.
Negotiable instruments denotes to document guaranteeing the payment of a specific amount of money like checks, drafts, credit cards, debit cards, Internet banking, mobile banking and branchless banking, among others.
Though the Asset Laundering Prevention Act (ALAP), 2008 requires any firm or individual to make transactions only through negotiable instruments while purchasing any products or services to a certain amount or more than the specific amount that the government publishes in the Nepal Gazette, the delay in announcing threshold for cash transaction has affected implementation of the provision.
“The use of negotiable instruments not only helps in controlling crimes, it will also help to reduce the cost of the government by lowering banknote printing costs. Also, banks can depute fewer staff at their cash counters," Hari Kumar Nepal, assistant director at Nepal Rastra Bank´s Financial Information Unit, said, making a presentation on ´Cash Transaction Threshold: Benefits and Challenges´. “The cost for the government in terms of publishing, issuing, circulating, handling and management, destruction and securities is increasing each year while the revenue leakage and under-invoicing is one the rise due to use of cash for transactions. Minimization of cash transactions will give the country´s economy a new dimension.”
According to Nepal, the central bank has proposed to the government set a threshold of Rs 100,000 for cash transactions. If the central bank´s proposal is endorsed by the government, use of cash for transactions worth more than Rs 100,000 will be considered an offense.
Article 41 of ALAP states that the government shall make an arrangement of such threshold in consultation with the central bank.
Bankers have cautiously welcomed the threshold proposal. While some bankers said such threshold should be increased, the other said that it should be implemented in a phase-wise manner. “The threshold might not be practical in rural areas. However, this should be implemented first in municipal areas and later in rural areas,” Rajan Singh Bhandari, outgoing president of Nepal Bankers Association, said.
Similarly, Anil Keshary Shah, vice-president of NBA, said cash-less society will help in ensuring transparent economy by curbing the flow of black money. “There is connection in cash, crime and corruption. Cash-less transaction helps to cut off the connection between cash, crime and corruption,” he added.
NRB Deputy Governor Maha Prasad Adhikari said the central bank was open to consider the threshold.
Officials of the central bank said they would implement threshold on cash transactions by giving one-year notice.
source: republica,6 dec 2014
LINK
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